Research Handbook on Intellectual Property and Competition Law
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Research Handbook on Intellectual Property and Competition Law

Edited by Josef Drexl

This comprehensive Handbook brings together contributions from American, Canadian, European, and Japanese writers to better explore the interface between competition and intellectual property law. Issues range from the fundamental to the specific, each considered from the angle of cartels, dominant positions, and mergers. Topics covered include, among others, technology licensing, the doctrine of exhaustion, network industries, innovation, patents, and copyright.
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Chapter 7: The Competitive Effects of Patent Field-of-Use Licences

Mark R. Patterson


* Mark R. Patterson 1 Introduction A common patent licensing technique is the field-of-use licence, under which the patentee grants the right to use the patented invention, but only in a specified way. In both the EU and the United States, the competition agencies view fieldof-use licensing as generally pro-competitive, because the ability to provide different licensing terms for different users can encourage broader licensing of inventions.1 For example, the US Supreme Court has upheld a field-of-use licensing arrangement under which several patentees licensed third parties to manufacture audio amplifiers using their patented technologies, but only for home use.2 This arrangement allowed the patentees to reserve the right to manufacture for commercial use, which was apparently more profitable, while still allowing the technologies to be used broadly for home applications. If licensing had required the patentees to share the commercial business as well, they might not have licensed the technologies for home use at all. However field-of-use licensing need not always be pro-competitive. The anti-competitive concerns can be especially great when the patentee imposes restrictions on the ultimate purchasers of the patented products rather than on * This Chapter was written before the recent US Supreme Court decision in Quanta Computer, Inc. v. LG Electronics, Inc. (June 2008). 1 See, for example, Commission Notice: Guidelines on the application of Article 81 of the EC Treaty to technology transfer agreements (hereinafter TT Guidelines), OJ 2004 No. C 101, p. 2, para. 182 (‘Field of use restrictions may have pro-competitive effects by encouraging the...

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